The week’s news included; Salesforce buys Slack for $27bn, Debenhams to close after 242 years in business, DoorDash seeks $32bn valuation in IPO, Lastminute.com agrees to refund customers for Covid-cancelled holidays.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- CNN – Forget bitcoin. These cryptocurrencies are surging even more.
- Legal Cheek – Top commercial awareness talking points for aspiring lawyers.
- The Guardian – How the ‘great reset’ of capitalism became an anti-lockdown conspiracy
- BBC News – Brexit trade deal: What are the sticking points?
1. PFIZER VACCINE APPROVED
The vaccine created by Pfizer and BioNTech has been approved for use in the UK by the medicine regulator, the MHRA. The UK has become the first in the world to approve the vaccine for roll out. 40 million doses of the Pfizer vaccine have been ordered by the UK, providing 20 million people with the two required shots. Roll out should becoming in the coming week, available to only the neediest first. This includes care home residents, carers, and older age groups. Vaccines will be available at hospitals, vaccines centres and at pharmacies and GPs.
Health secretary Matt Hancock erroneously claimed that the UK got the vaccine approved first due to Brexit. The MHRA confirmed approval was granted under the framework of European law, which the UK is still subject to until the end of the transition period.
The US’ top infectious disease expert, Anthony Fauci, suggested that the UK regulator had rushed the approval process. He said that he felt the UK did not review the vaccine as carefully as the US is. Facui has since clarified that he has full confidence in the UK approval process but was simply acknowledging that the US has a longer process.
The Pfizer vaccine has been found to provide 95% protection against Covid-19. Experts are cautiously optimistic that the UK and the world can return to normality.
For more on the different types of vaccines which are on the way click here.
2. SALESFORCE TO BUY SLACK IN $27BN DEAL
Business software firm Salesforce is buying video conferencing tool Slack in a huge $27.7 billion deal. Salesforce provides CRM software under a subscription model and is one of the innovators in the industry. It turned over $13.28 billion in 2019 and has been on an acquisition drive. In the past 7 years it has made 8 major acquisitions worth over $30 billion in total. This takeover of Slack is the largest and could be the most significant.
The deal is hoped to provide greater challenge to Microsoft and its teams software. Earlier this year, Slack filed a complaint against Microsoft for breaching competition law. It claimed the automatic integration of Teams into Office 365 gives Microsoft an unfair advantage and makes it more difficult for Slack to market its product. With the extra backing of Salesforce, Slack could now mount a greater challenge to Microsoft. Whether this plan will come to fruition remains to be seen.
3. DEBENHAMS CLOSURE
All of Debenham’s 124 stores are to close permanently with the loss of 12,000 jobs. Debenhams has been in administration since April 2020 but has been unable to find a buyer. The store will now enter liquidation where all its assets will be sold off. It has already cut 6500 jobs since May but even its trimmed operations were not sufficiently enticing for a buyer.
Debenhams has been a hallmark of the British high street. Founded way back in 1778, it has enjoyed over two centuries of trading. Its past few years, however, have seen it enter a tailspin from which it could not recover. As of 2020, Debenhams had a huge £600 million debt pile. In the year to September 2018 however, the store posted a record £491.5 million loss and went into administration in 2019. The company will now look to sell off all their stock before closing down for good.
4. ARCADIA GROUP COLLAPSE
Arcadia Group has officially collapsed into administration putting 13,000 jobs in jeopardy. There will be no immediate redundancies and operations will continue as normal. Store gift cards can, however, only be redeemed for up to half of the purchase price. The collapse affects brands including Topshop, Topman, Dorothy Perkins and Miss Selfridge. Administrators will now be seeking buyers for the assets of the company, including the brands. Most analysts are confident that Topshop and Topman will comfortably find suitable buyers but feel Arcadia’s other brands are more at risk. Arcadia’s pension fund will be assessed for entry into the Pension Protection Fund as administrators highlight a £350 million deficit. Arcadia operates 450 UK stores.
5. SUPERMARKETS RETURN RELIEF MONEY
Six of the largest UK supermarkets have agreed to repay business rate relief they received during the pandemic. Tesco, Asda, Sainsbury’s, Morrisons, Aldi and Lidl have all said they will repay the support money. Supermarkets have enjoyed healthy increases in sales during the pandemic, unlike most of their counterparts in other areas of retail. These supermarkets will collectively be returning over £1.7 billion to the government. Tesco, the UK’s largest supermarket, will return £585 million, the biggest individual sum. The companies conceded that returning the money was the right thing to do given that they have remained open throughout the pandemic.
6. DOORDASH IPO
DoorDash is seeking to raise $2.8 billion from its upcoming IPO. The food delivery firm will list 33 million shares at up to $85 per share. This will give it a huge value of $32 billion, nearly double its value in its most recent valuation. To put this in context, Just Eat and Deliveroo had valuations of just $8 billion and $2 billion respectively earlier this year. DoorDash is the largest player in the US market and holds 49% of the market.
DoorDash turned over $1.9 billion in the nine months to 30 September, up nearly 400% from last year. Like its competitors, DoorDash is a loss-making company but losses are narrowing. Losses shrank by over 60% in the period, down to $149 million.
7. CAFFÉ NERO REJECTS TAKEOVER BID
Caffe Nero has rejected a takeover bid from the incoming owners of Asda, Mohsin & Zuber Issa. The Issa brothers’ EG Group offered to takeover the firm and cover outstanding rent bills. Caffe Nero called the offer “unsolicited” and rejected it. Instead Caffe Nero will continue with its CVA and restructure its business while seeking rent reductions from landlords. The CVA will also probably entail store closures as well. Caffe Nero saw EG’s offer solely as a means to “disrupt the CVA process”.
Caffe Nero like many coffee shops has been severely hit by the pandemic. With office workers largely working from home, revenues have plummeted. The company believes however, that the CVA is the best route for long term viability.
In September, EG Group along with TDR Capital agreed to buy a majority stake in Asda for £6.8 billion.
8. LASTMINUTE REFUND DEAL
Package holiday firm Lastminute.com has agreed with the Competition and Markets Authority to refund over £7 million to 9,000 after hundreds of complaints . This is a landmark agreement as travel firms have refused to refund customers who suffered cancelled holidays due to Covid-19. The payment schedule is the first of its kind agreed with the CMA following thousands of complaints about travel firms’ refund delays. The legal deadline for refunding customers is 14 days. Due to the pandemic, most of the travel industry offered vouchers instead of refunds as they could not afford to refund all customers. Under the latest deal, half of Lastminute.com’s customers will receive refunds by 16 December while the remainder will receive their refunds no later than 31 January 2021. Those facing cancelling holidays on or after 3 December will receive refunds within the 14 day legal deadline.
9. BITCOIN RECORD HIGH
Bitcoin is back. It broke its previous record high hitting $19,920.53 last week. The cryptocurrency has risen 170% in 2020 and has enjoyed a steadier growth than the frenzy in 2017. Many investors are confident that the rally will continue, and it will soon break the $20,000 mark. In 2019, Bitcoin hit a low of around $3500 but since then it has gradually grown to meet its previous heights.
The latest drive has been driven by big players like PayPal creating Bitcoin wallets on its platform. As the hype returns investors are warned to be careful not to repeat the mistakes of 2017. Speculative investors collectively lost billions when the market crashed with many losing far more than they could afford. The market appears to have matured however, and we could see more cryptocurrencies entering the mainstream.
10. PREMIER LEAGUE AGREES RESCUE DEAL
The Premier League and English Football League have struck a £250m rescue package. This package will see a £200m loan for Championship clubs and £50m in loans for League One and Two clubs. England’s top league, The Premier League, will pay £15m to help the EFL secure the £200m. The loans will help cover lost matchday revenue and will be paid back by June 2024. BBC News looks at the loans in more detail.